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Financial Results for the Three Months
Ended June 30, 2006
July 28, 2006
OMRON Corporation
OMRON Corporation Investor Relations
Contents
Financial Results for the Three Months Ended June 30, 2006
1. Executive Summary
2. Results for the Three Months Ended June 30, 2006
3. Forecast for the Six Months Ending Sept. 30, 2006 and
Forecast for the Full Year Ending March 31, 2007
Notes:
1. Quarterly financial information is not audited or reviewed by an auditing corporation.
2. The financial state ments are prepare d in accordance with U.S. GAAP.
3. Includes 147 consolidated subsidiaries and 16 affiliated companies accounted for by the equity method.
4. Projections of results and future developments are based on information available to the Company at the
present time, as well as certain assumptions judged by the Company to be reasonable. Various factors could
cause actual results to differ materially from these projections. Major factors influencing Omron's actual results
include, but are not limited to, (i) the economic conditions surrounding the Company's businesses in Japan and
overseas, (ii) de mand trends for the Company's products and services, (iii) the ability of the Omron Group
to develop new technologies and ne w products, (iv) major changes in the fund-raising environment, (v) tie-ups or
cooperative relationships with other companies, and (vi) move ments in curre ncy exchange rates and stock
markets.
OMRON Corporation Investor Relations
2
Main Business Areas
Indus trial Automation
：Sensing Devices, Control Devices, Safety Devices,
Inspection Systems, etc.
IAB
Ele ctronic components
：Relays, Switches, Connectors, Micro Lens Arrays,
Backlights for LCD, Optical Communications Devices, etc.
ECB
Automotive Ele ctronics
：Keyless Entry System, Power Window Switches, Automotive relays
Components, Laser Radars, TPMS etc.
AEC
Social Sys te ms
：Passenger Gates, Ticket Vending Machines, Road Management System,
Security Management Systems, Face Recognition Systems, etc.
SSB
He althcare Equipment
：Digital Blood Pressure Monitors, Body Composition Analyzers
Nebulizer, etc.
HCB
Othe rs
：Personal Computer Peripherals, RFID Systems,
Commercial Game Machines, etc.
Others
HCB
10%
SSB
14%
Others
3%
Net sales 700 billion yen
IAB
43%
FY2006 Plan
AEC
13%
ECB
17%
OMRON Corporation Investor Relations
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1. Executive Summary
OMRON Corporation Investor Relations
4
Executive Summary
The Year ending March 2007 is the final milestone toward achieving 2nd phase objectives of Grand Design 2010
“Accelerating growth while securing profit increase advancing toward FY07 targets by front-loading growth”
1st Quarter Results and Key Points
■Sales results were as planned ; Operating income exceeded original target due to SG&A and
R&D expenses reduction
Consolidated
Result
vs. same period in prev. year vs. original target
Net sales
¥155.4 billion
112.2%
100.3%
Ope rating income
¥9.5billion
104.6%
126.9% (Operating margin 6.1%)
NIBT
¥13.6 billion
158.7%
136.1% ( NIBT margin
8.7%)
Net income
¥6.9billion
133.2%
114.3% ( NI margin
4.4%)
(1) Net sales :
12% increase over previous year due to strong performance by Electronic Components Business (ECB),
Automotive Electronic Components Business (AEC), and Healthcare Business (HCB)
(2) Operating income : Increase in gross profit due to increase of net sales was the main factor of 5% increase against
the original target (Refer to P.10)
27% increase over previous year due to SG&A and R&D expenses reduction (Refer to P.11)
(3) NIBT:
59% increase over previous year due to factors including gain on the establishment of a retire ment benefit
trust and a loss on the sale of land and buildings of the Tokyo Head Office.
(4) Business summary: Sales were strong. For Operating income, AEC faced difficult conditions
Full-Year Forecasts and Key Points
■Sales & income both forecast to be in line with original target
Consolidated
Net sales
Ope rating income
NIBT
Net income
Year ending March 31, 2007
vs. same period in prev. year
¥700.0 billion
111.7%
¥63.0 billion
101.4% (Operating margin 9.0%)
¥65.0 billion
101.0% (NIBT margin
9.3%)
¥37.5 billion
104.9% (NI margin
5.4%)
*Assumption: The PL influence of the announced two M&A is not included.
OMRON Corporation Investor Relations
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2. Results for the Three Months Ended
June 30, 2006
OMRON Corporation Investor Relations
6
Q1/FY2006
Consolidated Statements of Income
Sales: ¥155.4b ; Operating margin : 6.1%
Net Sales matched the original target ; Operating income was 27% increase YoY change
due to SG&A and R&D expense reduction
（ billion yen ）
Net sales
Gross profit
SG&A expense
R&D expense
Operating income
NIBT
NIAT
FY2005
Q1
FY2006
Q1
C han ge From
Actual(1)
Actual(2)
(2)/(1)
138.5
55.9
35.3
11.5
9.1
8.6
5.1
155.4
61.0
39.9
11.5
9.5
13.6
6.9
last year
112.2%
109.0%
113.1%
99.9%
104.6%
158.7%
133.2%
FY2006
Q1
Original
target(3)
155.0
62.0
41.0
13.5
7.5
10.0
6.0
C han ge From
Original
target
(2)/(3)
100.3%
98.3%
97.4%
85.3%
126.9%
136.1%
114.3%
（ yen ）
USD
EUR
108.1
136.2
114.8
144.1
6.7
7.9
OMRON Corporation Investor Relations
110.0
135.0
4.8
9.1
7
Breakdown of Sales by Region and Business
Q1/FY2006
Sales results were as planned in Japan and overseas
By segment, sales of ECB, AEC and HCB remained strong
（ billion yen ）
FY2005
Q1
Japan/Overseas
Japan
Overseas*
Total
Actual(1)
77.3
61.2
138.5
FY2006
Q1
Actual(2)
79.3
76.1
155.4
Change From
last ye ar
(2)/(1)
102.7%
124.3%
112.2%
FY2006
Q1
Original
Change From
target(3)
(2)/(3)
81.2
73.8
155.0
O rigin al
targe t
97.7%
103.1%
100.3%
* Overseas includes direct exports
By business
(1)
IAB
ECB
AEC
SSB
HCB
Others
Total
64.6
22.6
17.5
15.6
12.4
5.8
138.5
(2)
71.8
26.9
21.5
13.9
15.1
6.2
155.4
(2)/(1)
111.1%
119.3%
122.9%
89.4%
121.5%
106.8%
112.2%
OMRON Corporation Investor Relations
Original
target(3)
73.5
25.5
21.0
15.0
15.0
5.0
155.0
(2)/(3)
97.7%
105.7%
102.3%
92.9%
100.4%
123.7%
100.3%
8
Breakdown of Operating Income
Q1/FY2006
IAB
IABexceeded
exceededoriginal
originaltarget
targetdue
dueto
toexchange
exchangerate
rateand
andcost
costcutting
cutting
ECB
ECBand
andHCB
HCBremained
remainedstrong,
strong,AEC
AECwas
wasnegative
negativeagainst
againstoriginal
originaltarget
target
（ billion yen ）
By Business
IAB
ECB
AEC
SSB
HCB
Others
HQ Cost/Elimination
Total
FY2005
FY2006
C hange From
FY2006
C hange From
Q1
Q1
l ast year
Q1
O riginal
O riginal
targe t
target(3)
(2)/(3)
Actual(1)
10.7
2.3
0.1
-1.9
1.5
0.6
-4.2
9.1
Actual(2)
11.3
2.6
-0.8
-1.8
1.8
0.3
-3.9
9.5
(2)/(1)
105.6%
114.8%
115.9%
55.3%
104.6%
OMRON Corporation Investor Relations
11.1
2.1
0.1
-3.0
1.1
0.1
-4.0
7.5
101.8%
125.9%
163.0%
308.0%
126.9%
9
Breakdown of Changes in Operating Income
(comparison to previous year)
Q1/FY2006
Operating
Operatingincome
incomeincreased
increasedfrom
fromprevious
previousyear
yeardue
duetotonet
netincrease
increaseofofsales
sales
and
exchange
rate
gains
despite
investments
for
SG&A
expenses
for
growth
and exchange rate gains despite investments for SG&A expenses for growth
Sales increase
and Product mix
+1.5
-1.4
Raw
Exchange material
profit
Increase in
manufacturing
fixed cost
Increase in
SG&A
-2.3
expenses
+7.2
-4.6
（ billion yen ）
±0
Increase in
R&D
expenses
9.1
Change in gross profit
+5.0b
9.5
Change in operating income
+0.4b
Q1/ 2005
Q1/2006
10
Breakdown of Changes in Operating Income
(comparison to original target)
Q1/FY2006
Operating
Operatingincome
incomeexceeded
exceededoriginal
originaltarget
targetdue
duetotoSG&A
SG&Aand
andR&D
R&Dexpenses
expenses
reduction
and
exchange
profit
covered
increase
of
raw
material
price
reduction and exchange profit covered increase of raw material price
Decrease in
R&D
expenses
Exchange Raw
profit material
+1.4
-0.8
Product mix
-1.6
Decrease in
SG&A
expenses
（ billion yen ）
+2.0
+1.0
Change in gross profit
-1.0b
9.5
7.5
Change in operating income
+2.0b
Q1/2006 Results
Q1/2006 Target
OMRON Corporation Investor Relations
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IAB (Industrial Automation Business)
Q1/FY2006
Sales
Sales::¥71.8b
¥71.8b;;Operating
Operatingmargin
margin::15.7%
15.7%
Sales
SalesininJapan
Japanwere
werenegative
negativeagainst
againstoriginal
originaltarget
targetdue
duetotofall
fallininreaction
reactiontotostrong
strongdemand
demand
atatthe
end
of
the
previous
year
.
Overseas
sales
were
basically
in
line
with
original
target
the end of the previous year . Overseas sales were basically in line with original target
（ billion yen ）
IAB
Japan
Overs eas
North America
Europe
Asia
China
Export
Total
Operating income
Operating income ratio
Sales by region
FY2005
FY2006
Change From
FY2006
Q1
Q1
las t year
Q1
Original
target(3)
35.0
38.5
7.0
18.0
3.5
8.5
1.5
73.5
Original
target
(2)/(3)
94.1%
100.9%
107.7%
109.8%
92.7%
78.4%
110.6%
97.7%
11.1
15.1%
101.8%
Actual(1)
32.0
32.7
5.4
17.5
3.0
5.7
1.2
64.6
Actual(2)
33.0
38.9
7.5
19.8
3.2
6.7
1.7
71.8
(2)/(1)
103.1%
118.9%
140.7%
113.2%
108.6%
117.5%
136.0%
111.1%
10.7
16.6%
11.3
15.7%
105.6%
Asia
5%
China
9%
Change From
Export
2%
Japan
46%
Europe
28%
North America
10%
OMRON Corporation Investor Relations
12
ECB (Electronic Components Business)
Q1/FY2006
Sales
Sales::¥26.9b
¥26.9b;;Operating
Operatingmargin
margin::9.8%
9.8%
Large
Largesize
sizeLCD
LCDBack
Backlight
lightBusiness
Businessstarted
startedfull-scale
full-scaleoperations
operations
ECB
Japan
Overseas
North America
Europe
As ia
China
Export
Total
FY2005
Q1
FY2006
Q1
Change From
las t year
Actual(1)
11.5
11.1
2.2
3.1
1.3
2.9
1.6
22.6
Actual(2)
12.0
14.9
2.7
2.8
1.8
3.7
3.8
26.9
(2)/(1)
104.8%
134.2%
123.4%
91.8%
135.8%
127.2%
245.1%
119.3%
2.3
10.2%
2.6
9.8%
114.8%
Operating income
Operating income ratio
（ billion yen ）
FY2006
Change From
Q1
Original
Original
target
target(3)
(2)/(3)
12.3
97.5%
13.2
113.2%
2.8
97.9%
2.6
108.9%
1.6
114.3%
4.2
88.6%
2.0
191.2%
25.5
105.7%
2.1
8.2%
125.9%
Export
14%
Sales by region
China
14%
Japan
44%
Asia
7%
Europe
11%
North America
10%
OMRON Corporation Investor Relations
13
AEC (Automotive Electronic Components Business)
Q1/FY2006
Sales
Sales: :¥21.5b
¥21.5b; ;Operating
Operatingincome
incomewas
wasnegative
negativedue
duetotoincreasing
increasingcost
costfor
for
raw
rawmaterials
materialsand
anddelays
delaysininproductivity
productivityimprovement
improvementfor
forsome
someproducts
products
FY2005
Q1
AEC
Japan
Overseas
North America
Europe
As ia
China
Export
Total
Operating income
Operating income ratio
Change From
las t year
Actual(1)
6.5
10.9
5.8
1.6
3.5
0.0
0.0
17.5
Actual(2)
6.5
15.0
8.7
2.3
3.8
0.2
0.0
21.5
(2)/(1)
99.7%
136.8%
149.3%
140.6%
108.8%
122.9%
0.1
0.4%
-0.8
-
-
Asia
18%
Sales by region
FY2006
Q1
China
1%
Export
0%
Europe
11%
FY2006
Q1
Original
target(3)
6.5
14.5
8.2
2.2
4.0
0.1
0.0
21.0
0.1
0.5%
（ billion yen ）
Change From
Original
target
(2)/(3)
100.1%
103.3%
105.8%
104.0%
95.6%
193.0%
102.3%
-
Japan
30%
North America
40%
OMRON Corporation Investor Relations
14
SSB (Social Systems Business)
Q1/FY2006
Sales
Sales::¥13.9b
¥13.9b;;Operating
Operatingincome
incomeimproved
improveddue
dueto
tocost
costreduction
reduction
SSB
Japan
Overs eas
Total
FY2005
Q1
Actual(1)
15.2
0.3
North America
0.0
Europe
0.0
Asia
0.0
China
0.0
Export
0.3
15.6
Operating income
Operating income ratio
-1.9
-
FY2006
Q1
Change From
last year
Actual(2)
13.9
0.0
0.0
0.0
0.0
0.0
0.0
13.9
(2)/(1)
91.1%
14.5%
104.3%
－
－
－
0.1%
89.4%
-1.8
-
－
－
（ billion yen ）
FY2006
Change From
Q1
Original
Original
target
target(3)
(2)/(3)
14.4
96.4%
0.6
8.2%
0.1
49.0%
0.0
－
0.0
－
0.0
－
0.5
0.0%
15.0
92.9%
-3.0
-
－
－
Sales by region
Japan
100%
OMRON Corporation Investor Relations
15
HCB (Healthcare Business)
Q1/FY2006
Sales
％
Sales: :¥15.1b
¥15.1b; ;Operating
Operatingmargin
margin: :11.9％
11.9％
％
Japan
sales
were
basically
in
line
with
budget.
Overseas
Japan sales were basically in line with budget. Overseassales
salesremained
remained
strong
strongdue
duetotosales
salesgrowth
growthininEurope
Europe
HCB
Japan
Overs eas
Total
FY2005
Q1
FY2006
Q1
Actual(1)
6.3
6.1
North America
2.9
Europe
2.0
Asia
0.5
China
0.7
Export
0.1
12.4
Operating income
Operating income ratio
1.5
12.5%
Sales by region
Europe
19%
Change From
las t year
Actual(2)
7.8
7.2
3.0
2.8
0.3
0.7
0.4
15.1
(2)/(1)
124.1%
118.7%
104.2%
143.8%
67.9%
101.7%
714.0%
121.5%
1.8
11.9%
115.9%
FY2006
Q1
Original
target(3)
8.0
7.0
3.5
2.2
0.3
0.9
0.1
15.0
1.1
7.3%
（ billion yen ）
Change From
Original
target
(2)/(3)
98.1%
103.0%
85.3%
127.8%
111.3%
80.2%
357.0%
100.4%
163.0%
China
Asia 5% Export
2%
2%
Japan
52%
North America
20%
OMRON Corporation Investor Relations
16
Q1/FY2006
Consolidated Balance Sheet
Due
Dueto
toreduction
reductionin
intotal
totalassets,
assets,shareholders’
shareholders’equity
equityratio
ratioincreased
increased
from
from61.6%
61.6%at
atprevious
previousyear-end
year-endto
to64.8%
64.8%
（ billion yen ）
Total Assets
Cash and cash equivalents
Notes and accounts receivable - trade
Inventories
Other current assets
Net Property, Plant and Equipme nt
Investments and Other Assets
Total Liabilities
Bank Loans / Current portion of L/T debt
Long-term debt
Other liabilities
Shareholders' Equity
June 2005
570.3
70.2
106.9
70.3
30.5
155.3
137.1
259.9
24.5
2.1
233.3
310.4
March 2006
589.1
52.3
136.3
75.0
28.8
167.6
129.1
226.2
2.8
1.0
222.4
362.9
OMRON Corporation Investor Relations
June 2006
556.9
58.9
117.0
87.4
29.5
150.8
113.3
196.3
2.9
1.2
192.2
360.6
17
Q1/FY2006
Consolidated Statements of Cash Flows
Net
Netcash
cashprovided
providedby
byinvesting
investingactivities
activitiestotaled
totaled¥2.3b.
¥2.3b.
While
WhileOmron
Omronmade
madeinvestments
investmentsfor
forthe
thefuture,
future,ititsold
soldthe
theland
landand
andbuildings
buildingsofof
the
theTokyo
TokyoHead
HeadOffice.
Office.
（ billion yen ）
FY2005
1Q
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Free cash flow
Net cash used in financing activities
Effect of exchange rate changes
Net increase (decrease)
Cash and cash equivalents at end of the period
8.1
-11.6
-3.5
-3.2
-3.8
-10.4
70.2
OMRON Corporation Investor Relations
FY2006
1Q
6.7
2.3
9.0
-3.6
1.2
6.6
58.9
FY2005
51.7
-43.0
8.7
-38.3
1.3
-28.3
52.3
18
3. Forecast for the Six Months
Ending Sept. 30, 2006
And
Forecast for the Full Year
Ending March 31, 2007
OMRON Corporation Investor Relations
19
H1/FY2006
Forecast of Consolidated Statements of Operations
No change from initial budget
当初計画値より
当初計画値より変更
より変更なし
変更なし
（ billion yen ）
C hange from
FY2005
FY2006
YOY
FY2006
O riginal
1H
1H
Change
1H
targe t
Actual
Forcasts
％
Target
285.4
117.2
320.0
129.5
112.1%
110.5%
320.0
129.5
％
100.0%
100.0%
SG&A
73.2
81.5
111.4%
81.5
100.0%
R&D
24.7
28.0
113.3%
28.0
100.0%
'Daiko henjyo' *
Operating income
11.9
31.3
20.0
64.0%
20.0
100.0%
NIBT
31.8
22.0
69.3%
22.0
100.0%
NIAT
16.7
12.5
74.7%
12.5
100.0%
Net sales
Gross profit
-
-
（ yen）
<Currency Rate>
USD
109.9
112.8
2.9
110.0
2.8
EUR
136.2
140.2
4.0
135.0
5.2
*‘Daiko henjyo is return of substitutional portion of pension fund
*Assumption: The PL influence of the announced two M&A are not included.
OMRON Corporation Investor Relations
20
FY2006
Forecast of Consolidated Statements of Operations
No change from initial budget
（ billion yen）
C hange from
FY2005
Actual
Net sales
Gross profit
SG&A
R&D
'Daikohenjyo'
Operating income
NIBT
NIAT
<Currency Rate>
USD
EUR
626.8
253.4
152.7
50.5
11.9
62.1
64.4
35.8
FY2006
Forcasts
700.0
282.0
163.5
55.5
63.0
65.0
37.5
YOY
Change
%
111.7%
111.3%
107.1%
109.9%
101.4%
100.9%
104.9%
FY2006
Original
target
700.0
282.0
163.5
55.5
63.0
65.0
37.5
O riginal
targe t
%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
（ yen）
113.4
138.2
111.5
137.8
-1.9
-0.4
110.0
135.0
1.5
2.8
*Assumption: The PL influence of the announced two M&A are not included.
OMRON Corporation Investor Relations
21
One of risk factors for the future
FY2006
Sharp
Sharpincrease
increaseininthe
theprice
priceofofcopper
copperand
andsilver
silver from
fromthe
theend
endofofMarch
Marchtoto
May,
May,2006.
2006.Although
Althoughthe
theprice
pricedropped
droppedback
backininJune,
June,
showing
showingan
anupward
upwardtendency
tendencyagain
again
silver price
（yen/kg）
Silver
銀建値
copper price
Copper
銅建値
60,000
（yen/kg）
1,100
55,000
1,000
900
50,000
800
45,000
700
40,000
600
35,000
500
30,000
400
25,000
300
20,000
200
15,000
100
FY2003
FY2004
FY2005
OMRON Corporation Investor Relations
FY2006
22
（ Reference）
）
M&A
23
M&A
Strengthening the Safety Business
Acquisition of Scientific Technology Inc. (STI)
Creating a global market leader in safety products for factory automation
Acquisition of the leader of the North American safety devices
Consolidate in Q2
Changes in society and customer needs: With social trend toward strengthening CSR on a global
base, manufacturing industry needs are rapidly rising for safety as well as higher productivity
Background
Expansion of safety components market: Annual global growth of 15%. Will reach ¥170b in FY2008.
Necessary to combine diverse products for equipment safety.
1) Enhancing product lineup and expanding business fields : Strengthening safety
components and raising total solutions capability
Objective
2) Accelerating new product creation by strengthening development capability :
Obtain optical application technology and robust response know-how to combine
with sensing and control technology
Aim for top global share with sales of ¥30b in FY2008
Target
¥30b
¥10b
FY０５
０５
FY０６
０６
FY０７
０７
FY０８
24
M&A
Strengthening the Backlight Business
Acquisition of Pioneer Precision Machinery Corp.
Aim to become the world’s top LCD backlight manufacturer by
supplementing our strengths with a full small/medium/large-scale lineup
Consolidate in Q2
Screen size
<Application>
Large
Medium
TAMA Fine Opto
New introduction of
multi light source
backlights
Domain of
LCD TVs
Desktop monitors
Notebook PCs
Car navigation systems
Portable game consoles
Pioneer
Precision
Small
OMRON
single light source
Improvement of
visual quality
PDAs
Digital cameras
Mobile phones
Function
Low-end
High-end
25
Aiming for the Best Matching of
Machines to Human Beings
OMRON Corporation
-Contacting us Finance and Investor Relations Headquarters
Investor Relations Department
Phone: +81-3-3436-7170
E-mail: [email protected]
URL: www.omron.co.jp
Progress of Key Strategic Themes
(1)Sales Growth in New Tech Fields
Q1/2006
Raised March 2008 target to ¥82.0b from initial ¥68.0b.
Aiming for 166% growth, which is ¥56.9b in March 2007.
(billion yen)
90.0
80.0
70.0
GD2010 2nd stage Target
Products in New Tech Fields
82.0b
IAB：Automated Optical Inspection Systems, etc.
ECB：Back light for LCD, etc.
144%
ECB：MEMS Sensors, etc.
AEC：Laser radars for automobiles, etc.
60.0
56.9b
166%
50.0
119% 34.3b
40.0
30.0
160% 28.8b
18.0b
20.0
6.9b
10.0
0
FY03
FY04
FY05
138％
％
9.5b
FY06
FY07
Progress of Key Strategic Themes
(2)Sales Growth in Greater China
Q1/2006
27% increase YoY Change, but sales were below the original plan
in Q1, FY2006
（MUSD)
1400
1330
1200
Q1 FY2006 Actual
197%
YoY Change 127%
1000
Change from Original target 90%
800
165%
600
411
± 0%
676
412
400
200
97
137
124
0
FY04
Actual
FY05
Actual
FY06
Plan
FY07
Target